The National Credit Union Administration has begun liquidating the Walter Reed Army Medical Center Federal Credit Union because of insolvency. The credit union had more than 7,000 members.
The federal agency closed the credit union Aug. 15, two weeks after credit union officials failed to appear or send a representative to an administrative hearing that the credit union was in failing financial health.
"There were heavy loan delinquencies and other financial situations which left the credit union in a situation where it could not pay dividends," said David Mackley, chief of the chartering, insurnace and liquidation branch of NCUA's regional office. Mackley said the assets of the credit union had dwindled from about $10 million in 1972-73 to about $2.9 million.
Credit union members have been paid by the NCUA, which insures federal credit unions, for money they were owed by the credit union. Approximately $2.5 million worth in checks have been mailed, said Bob Marquette, a liquidation specialist overseeing the closing.
Among the credit union's problems were bad loans made over a period of time and heavy operating expenses that pushed the institution to a point where "the shares of members were not worth a dollar per dollar," said Mackley. Although credit unions generally have suffered from an outflow of savings, loan delinquencies and other problems in the past year, NCUA officials said that the Walter Reed credit union's problems had begun long before the downturn in the economy.
Most of the members of the credit union are employes of the hospital and others who are stationed at Walter Reed. "It's been in a downhill slide," said Mackley.
Although the Walter Reed credit union is one of the larger credit unions in this region to be shut by NCUA, such closings are not infrequent, according to Mackley. The regional office liquidates from 20 to 30 credit unions a year for a variety of reasons, including plant closings, he said.